Break-even analysis paper.

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Learning Team CVP And Break-Even Analysis Paper and Presentation
August 29, 2011
Diane Rogers

The Federal Trade Commission (FTC) lists many topics on its website for potential franchisees to consider before deciding to purchase a franchise. The FTC website describes the franchisor’s disclosure document as all-important. The franchisor’s disclosure document should includeinformation about the franchisor in the areas of length of time in business, initial and ongoing costs, restrictions, training, current and former franchisees, and advertising. A potential franchisee should also consider the economic health of the industry in which the franchise exists (FTC, 2008). Many industries have franchise opportunities. With total revenues estimated at $17.6 billion a year, thefitness centers industry has a strong history of economic stability and growth. In the last two decades fitness center memberships have increased by 231 percent (, 2010). Growth in this industry is expected to increase because the number of obese adults in the U.S. is expected to grow. Currently, over 55% of U.S. adults suffer from obesity. Since the early 1990’s the fitnesscenter industry has experienced an annual growth rate of 8% including times when the overall economy was experiencing a recession. In the last two decades fitness center memberships have increased by 231 percent (, 2010).
Snap Fitness Centers Franchise Summary
One fitness center franchise that has seen success is Snap Fitness Centers. Snap Fitness Centers offer the sale ofmemberships that allow members 24 hour keycard access to state-of-the-art exercise equipment. Members have access to an online training page. personal fitness consultation, wellness plan and web page, automated member billing and collection procedures and services and web-accessible video surveillance, proprietary and confidential information. A Membership entitles the individual to access anduse the franchisor’s Center and any Affiliate-owned Centers. Incorporated in 2003, Snap Fitness Centers started offering franchises in 2004. They have opened 24 hour accessible fitness centers in 46 states of the U.S. as well as in the countries of Mexico, Canada, India, Australia and New Zealand. The following list contains ratings for Snap Fitness Centers:
2009/2010 Rankings
EntrepreneurMagazine: Best in Category - Health and Fitness (#1)
Entrepreneur Magazine: Top New Franchises (#2)
Entrepreneur Magazine: Fastest-Growing Franchises (#5)
Inc. Magazine: Top 500 Businesses (#16) (, 2011)

Franchisees for Snap Fitness Centers have the responsibility of selling memberships and operating the business. Snap Fitness Centers offers several in-house support teams andoffers in-house financing. The franchise process includes assistance from an in-house real estate team for site selection assistance to help franchisees choose a location with maximum profit potential. Another in-house team will assist the franchisee with planning and execution of the club build out. The Snap Fitness Centers franchise agreement provides for a pre-opening training for two members ofmanagement that covers business operations, sales and marketing, and membership support. The franchise agreement includes grand opening support with fully-integrated marketing campaigns to help spread the word about the fitness center opening in the local community (, 2011).
Franchisee support does not stop at the grand opening. Snap Fitness Centers provide year-roundpromotional support and marketing campaigns for franchisees. For operational assistance, franchisees can access a comprehensive online portal that has tools, tips and training resources for ongoing education. Franchisees receive assistance from dedicated corporate franchise account representatives available to help manage marketing, sales and operational questions whenever needed. All franchise owners...
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